Selling Sickness
A key question that I often ponder on is “Are pharmaceutical companies really incentivised to make people well”?
As the cost of medicines and other medical treatments seems to be on an accelerated upward trajectory here in South Africa, where I live, it’s a timely question.
The popular narratives seem to paint big drug firms as either heroic lifesavers or rapacious profit-seekers. I suspect that the truth is more complex and that there are elements of both.
This article aims to demonstrate that, in certain instances, the alignment between business incentives and genuine health outcomes is robust. In many other cases, it is weak or even inverted.
How the System Currently Works
At its core, the commercial pharmaceutical model operates as follows: a company invests in research and development (R&D), obtains regulatory approval, secures a period of exclusivity (via patents or data protection), launches a product, and then seeks to recoup its investment and earn a profit before competition enters the market.
Over that window, price and volume matter.
For example, in many jurisdictions, new chemical entities (NCEs) receive five years of data exclusivity in the U.S., biologics often twelve years; in the EU, the “8 + 2 + 1” rule can yield up to eleven years of market protection under certain circumstances.
Companies must sell enough at a high enough price to justify the gamble of R&D, regulatory risk, and market launch.
At face value, this seems reasonable.
The core argument is that we need incentives to motivate innovation, particularly for risky, high-cost biomedical ventures. One recent review concluded that (although the empirical evidence is ambiguous) longer effective protection periods do appear to correlate with higher R&D investment, but with diminishing returns and considerable variation across countries.
Incentives Misaligned with Wellness
The divergence begins when business incentives favour maintaining or increasing demand rather than eliminating it; when marketing, pricing, and supply chain practices emphasise volume, margin, and growth rather than sustained population health benefits.
A few dynamics are key:
1. Marketing and Prescribing Influences
Research shows pharmaceutical marketing exerts considerable influence. For example, a 2024 study in Frontiers in Medicine found that promotional practices and incentives offered to physicians or students affected prescribing behaviours, not always aligned with optimal care.
These influence pathways raise questions: if a company has more to gain by selling more units rather than curing the disease (or preventing it altogether), where is the incentive to end demand?
2. Evergreening and Lifecycle Management
Many firms practice what is termed “evergreening” (e.g., filing minor modifications, new formulations, secondary indications) to extend exclusivity and delay generic competition.
Competition authorities in South Africa and elsewhere have flagged this as a barrier to access.
3. High Prices and Complex Supply Chains
Prices often reflect monopoly power, not just cost.
In the U.S., for example, list prices of drugs remain far above those in other OECD countries, and intermediaries (like pharmacy benefit managers) may capture margins. The result is that patients face high out-of-pocket costs, and the system does not necessarily channel any savings back to health outcomes.
4. The Volume Problem
If a drug cures a disease completely and soon, the market shrinks rapidly. That’s great for patients, but not ideal for a business that needs sustained revenue.
This dynamic can skew a firm's strategy toward chronic therapies, incremental improvements, or treatments rather than cures, unless the business model is explicitly designed otherwise.
Consider antibiotics as an example.
Since stewardship policies aim to restrict use (to prevent resistance), the traditional volume-based model does not work well. That leaves a gap between public health need (new antibiotics) and the business incentive.
Some countries are now testing “subscription” or “delinked” payment models to address this.
Cases Where Incentives Align with Wellness
It isn’t all a mismatch.
Several examples demonstrate how commercial development can deliver significant population health benefits when business, policy, and public health align.
Vaccines: For example, the World Health Organisation estimates immunisation prevents 4–5 million deaths each year. When procurement, manufacturing scale and market incentives converge, the health gains are enormous.
Transformative therapies: For example, highly effective drugs for HIV or direct-acting antivirals for hepatitis C turned certain diseases from death sentences into chronic or cured conditions. In those circumstances, business incentives and health benefits aligned.
Novel payment models: Some newer proposals aim to reward companies not just for sales but for their impact, e.g. a Health Impact Fund which would reward firms based on the measurable health impact of their products, rather than the volume sold.
So alignment is possible. However, it often only arises when policy, procurement, and competition are intentionally structured to support it, rather than happening automatically.
Companies are incentivised to sell products that command high prices and protected markets. They are less (in the base case) incentivised to eliminate the need for those products.
Health-aligned incentives (preventing disease, curing it, and lowering prevalence) often require layered policies, including pricing reform, competition policy, and alternative payment models, because the default market logic doesn’t always reward these outcomes.
Shifting the Market
If the goal is to shift incentives toward wellness (prevention, cure, access, value) rather than just product sales, here are some potential levers:
Value- and outcomes-based pricing: Reward and reimburse companies based on the actual health benefits delivered, such as longer lives and improved quality of life, rather than simply on the number of units sold.
Delinking revenue from volume: In areas such as antibiotics or cures, where volume should be low or limited, alternative payment models (such as subscriptions, fixed annual fees, or prizes) can ensure profitability even without high unit sales.
Stronger competition and access regulation: Prevent evergreening abuse, ensure timely generic/biosimilar entry and reduce monopoly rents.
Transparency in supply chains and marketing: Clearly disclose where margins are allocated, eliminate misaligned incentives (e.g., prescribing factoring in manufacturer payments), and strengthen regulation of marketing practices.
Public and philanthropic investment in underserved areas: Diseases or conditions where commercial incentives are weak (e.g., neglected tropical diseases, antibiotic pipeline, diagnostics) still require public-driven investment.
Wellness wins when we design the rules and incentives around value, not just sales.
Vitamins, Minerals and the Wellness Boom
Beyond prescription medicines, another segment of the wellness economy is worth exploring, namely vitamin and mineral supplements (and related dietary supplement products).
Many people take them with good intentions, aiming to fill nutrient gaps, support immune function, and improve energy levels, among other benefits. But how strong is the evidence, what are the regulatory safeguards, and are we paying for value or hype?
1. Regulation and Marketplace Structure
In the U.S., the regulatory framework for dietary supplements is fundamentally different from that for medicines, as is the case in many other countries.
Under the Dietary Supplement Health and Education Act of 1994 (DSHEA), supplements are regulated more like foods than drugs: they do not require pre-market approval for safety or efficacy, nor are manufacturers required to prove therapeutic claims as drugs must.
The U.S. Food and Drug Administration (FDA) confirms that while manufacturers must ensure product safety and truthful labelling, they do not have to submit evidence to the FDA before marketing most new supplements (unless they contain a “new dietary ingredient” introduced after 1994).
In practice, this means the supplements space is far less tightly regulated than the prescription drug sector.
2. When Supplements Contribute to Wellness
There are clear scenarios where vitamins and minerals deliver real value. For example:
Nutrient deficiencies: If a person is deficient in vitamin D, Iron, Iodine, Folate, etc., supplementation can correct the deficiency and thereby improve health outcomes.
Specific population groups, including individuals with malabsorption disorders, those following restricted diets, individuals with certain medical conditions, or those with limited sun exposure, may benefit from targeted supplementation.
Public health policy: Some studies suggest that broader access to certain micronutrient supplements could lead to health system savings. For example, a position paper by supplement-maker Haleon indicates that for every US$1 spent on vitamin D and calcium for older Australian women, more than US$20 in avoided medical costs is reportedly yielded (in a modelling context). This would need to be validated by additional studies, but it is indicative of the potential benefits.
In these contexts, supplements can serve as adjuncts to diet and lifestyle; they fill gaps rather than replace foundational wellness behaviours.
3. When the Value is Dubious or Overpriced
The picture is more nuanced, and often more problematic, when we examine the vast majority of supplement use. Issues that stand out include:
Low evidence for broad use in healthy individuals: For individuals eating a reasonable diet and not clinically deficient, the value of taking multivitamins or broad-spectrum supplements is limited. Large-scale trials have often failed to show benefit in reducing chronic disease incidence.
Regulatory blind spots and variable quality: Since regulation is less stringent, quality control can vary. Products may differ from their label, may contain adulterants, or may make unverified claims. The American Medical Association (AMA) has flagged this as a concern.
Perception of “more is better” and marketing hype: Many supplements are heavily marketed for broad wellness, anti-ageing, cognitive enhancement or immune-boosting. The risk is paying premium prices for marginal benefit.
Interaction risk and opportunity cost: Some supplements can interact with medications or have adverse effects, while others may lead people to neglect other, more evidence-based behaviours (such as diet, exercise, and screening).
Pricing and profit motives: Just as in the pharmaceutical industry, the supplement industry is driven by revenue. The lighter regulation can allow aggressive marketing of marginal products.
4. Some Practical Guidelines for Supplements
Start with diet and lifestyle: If you are well-nourished and eating a varied diet, that remains your first line of defence. Supplements are not a substitute for healthy lifestyle foundations.
Use targeted supplements where deficiency or risk is evident: If blood tests or clinical context indicate a deficiency (such as vitamin D, Iron, or Folate), supplementation makes sense.
Be modest about claims for broad “wellness” pills: Proprietary blends, trendy ingredients or high-priced multivitamins are rarely supported by strong evidence for healthy individuals.
Check product quality and regulation: Choose trusted brands that adhere to good manufacturing practices. Recognise that regulation is less stringent; extra caution is warranted.
Don’t ignore cost-effectiveness: Some supplements may yield little benefit in relation to their cost. Ask: “What am I getting for this money that I could not achieve with food or lifestyle?”
Discuss with a health professional: Especially if you have medical conditions or take medications, always check before starting supplements.
Supplements can add value when used appropriately and strategically, but they risk being overpriced or even wasted when used as “insurance pills” by otherwise healthy individuals expecting significant returns.
The Big Picture: Wellness, Disease and Business
Now let’s bring the three threads together: prescription medicines, the broader wellness economy (including supplements), and the question of incentives.
1. Disease-Treatment Business
When you are sick and need a drug, business incentives around prescription medicine more clearly align with healing.
A company that discovers a genuinely effective therapy can improve lives, build a reputation, win regulatory approval, and earn revenue. The tricky bit is when the business model stays viable only by sustaining demand (chronic treatment) rather than eliminating it (cure).
This is when incentives shift away from wellness toward maintaining the market.
2. Wellness-Prevention Business
Here, the model shifts.
In theory, prevention (through screening, healthy lifestyle, vaccines, and nutrient sufficiency) should yield significant population health benefits at a lower long-term cost.
However, business incentives for prevention are weaker in many cases: fewer pills are sold, smaller margins, and longer payoff periods.
That’s why policy interventions (value-based procurement, public funding, risk-sharing) become more critical. Without such a design, prevention remains underfunded relative to its potential.
3. The Supplement / Wellness Consumer Market
It is a largely consumer-driven market with light regulation and heavy marketing.
It overlaps both treatment (in specific deficiency contexts) and prevention (in the general population). The risk is that products marketed under the banner of “wellness” may exploit anxieties, rely on promises rather than proof, and skew the incentive toward volume and margin rather than proven benefit.
Conclusion
So what’s the bottom line?
Default incentive structures in the pharmaceutical and wellness sectors do not consistently reward the prevention of disease, its cure, and the reduction of demand for medicine.
Instead, they reward selling products. That means realising wellness at scale requires policy design, regulatory oversight, public investment, and consumer education.
In the supplements context, the promise is compelling: fix deficiencies, support wellness, avoid disease. The execution, however, is uneven, with mixed evidence for broad use. Regulation is lighter, and the profit motive remains. So while many supplements are worthwhile in the proper context, the industry as a whole deserves scrutiny.
From a societal perspective, we need a system where the business model drives better health outcomes, not just greater sales.
When it does, both industry and society will benefit. When it doesn’t, we pay the cost in lives and dollars.
Until next time, the challenge is to tilt the incentives toward wellness for individuals, populations and economies.
Dion Le Roux
References
1. Cadwallader A. B. (2022) “Which features of the dietary supplement industry, product trends and regulation deserve physicians?” AMA Journal of Ethics.
2. Coates P. M. (2024) “The evolution of science and regulation of dietary supplements.” Journal of Nutritional Biochemistry.
3. Dubois, P. (2025) “Pharmaceutical regulation and incentives for innovation.” TSE Working Paper.
4. Kyle M. K. (2022) “Incentives for pharmaceutical innovation: what’s working, what’s not.” Research Policy.
5. Maholwana M. J. G. (2004) “Ethical and legal considerations concerning the interaction between doctors and the pharmaceutical industry in South Africa.” (University of Witwatersrand dissertation).
6. “Meaningful access to vitamin and mineral supplements” (2023) Position paper, Haleon.
7. Sachs B. R. (2023) “A holistic view of innovation incentives and pharmaceutical …” PMC.
8. U.S. Food and Drug Administration. (2024) “Questions and Answers on Dietary Supplements.”
9. U.S. Office of Dietary Supplements / National Institutes of Health. (2023) “Dietary Supplements: What You Need to Know.”